Despite recent tensions, it seems that concerns surrounding the ‘global trade war’ are abating, with both US president Donald Trump and China softening their respective stances overnight.<\/p>\n
TreasuryOne analyst Andre Botha, said that, as a result, there has been a collective sigh of relief across markets, which means that\u00a0ordinary risky assets like the stock markets ended up well in the green at opening on Tuesday (27 March).<\/p>\n
“This bodes well for the rand and other risky assets going forward, and we might see a renewed push lower for the rand,” he said.<\/p>\n
“Looking at the political landscape and economic sentiment we feel that the rand is in a great position to gain some ground. Barring some unforeseen event, we could see the rand breaking below the R11.50 level and maybe trying to test as low as R11.20.<\/p>\n
“The scene is set perfectly for some rand gains, with the political mood and overall sentiment in South Africa buoyant and events across the oceans looking a lot rosier,” he said.<\/p>\n
Despite the positivity, Botha said that the rand is still expected to\u00a0trade in tight ranges, as it looks to break below the R11.60 level.<\/p>\n
“The main event this week will be the MPC rate decision tomorrow where we expect a 25bp cut in the interest rate.<\/p>\n
“Much will be made of the tone of the MPC statement and whether we could see more cuts going forward which could cause a knee-jerk in the rand,” he said.<\/p>\n